Illinois Credit Rating Lowered Over Pensions
By Samantha Abernethy in News on Aug 29, 2012 10:15PM
Standard & Poor's rating service announced today that it is lowering Illinois' credit rating from A-plus to A due to its weak pension funding levels and lack of reform. Now only California has a lower credit rating than Illinois.
"The downgrade reflects the state's weak pension funding levels and lack of action on reform measures intended to improve funding levels and diminish cost pressures associated with annual contributions," said Standard & Poor's credit analyst Robin Prunty. "The downgrade also reflects continued financial weakness despite significant measures in the past two years to improve structural budget performance," added Ms. Prunty.
In July Gov. Pat Quinn called for a special session to address pensions, and the General Assembly met on Aug. 17. They made little progress on pensions, succeeding only in expelling indicted state Rep. Derrick Smith from the chamber. Illinois Treasurer Dan Rutherford told Reuters that the issue probably won't be addressed until after the Nov. 6 election.
”Eliminating our $83 billion unfunded pension liability is vital to getting our financial house in order," said Quinn in a statement this afternoon. "Today’s action by Standard & Poor’s is more evidence that we must act."